Pandemic cost state €4.7B in first 7 months of year

The Covid-19 pandemic cost the Portuguese state €4,697.7 million in the first seven months of this year, of which €485.4 million was in terms of suppressing revenue and €4,212.3 million in increased spending, according to the Directorate-General of the Budget (DGO).

“To the end of July, the implementation of measures adopted in the fight against and prevention of Covid-19, as well as those aimed at restoring normality, led to a reduction in revenue of 485.4 million euros and an increase in total expenditure of 4,212.3 million euros,” the DGO states in its latest Summary of Budgetary Implementation, published late on Wednesday.

The total impact of the pandemic was thus €4.697,7 in the period from January through July.

On the revenue side, the DGO highlighted the impact of the extension of the waiver for payment of self-assessed corporate income tax, estimated at €179.6 million, and the exemption from payment of employers’ social security contribution, estimated at €203 million in the first half of the year.

On the spending side, support for companies and employment totalled €2.331.1 million, including the Apoiar programme (€995.9 million), extraordinary support for the progressive recovery of activity (€473.1 million) and simplified lay-offs or furloughs (€366.6 million).

The DGO also cited measures to support households (€657.7 million), highlighting extraordinary support to workers (€349.9) and the measures in the health sector (€805.6 million), namely in human resources, vaccines and personal protective equipment, medicines, coronavirus tests and vaccines against Covid-19.

“In the absence of the expenses associated to the measures in the scope of Covid-19, actual public sector expenditure would have grown 0.8% in relation to the previous year (instead of +3.7%) and the actual revenue would have increased 6.6% (instead of +8%),” the DGO summary reads.